Gusher of New Facebook Shares Dents Stock Price

Facebook stock is down roughly 4 percent today after 254 million company shares unlocked and hit the public market.

That’s a relatively modest decline given that the “float” of Facebook shares, the number available to public market investors, grew 37 percent today as current and former Facebook employees became eligible to sell restricted stock units. In August, after the Facebook float grew 60 percent following a similar unlock period expiring, Facebook shares fell 6 percent as the market absorbed the new shares.

The biggest flood of Facebook shares will come in November, when 823 million employee stock units and options will be unlocked (plus another 504 million shares belonging to Mark Zuckerberg, which Zuckerberg says he won’t sell within 12 months). That will nearly double Facebook’s float. Judging by today’s trading, Facebook won’t have to worry about its stock getting pummeled, though it’s likely to keep the downward pressure on Facebook shares at least for the near term. Over the long term, however, convincing Facebook employees to hold their stock will have less to do with historic patterns and much more to do with whether Facebook can keep growing profits, selling mobile ads, and winning back Wall Street.